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China's central bank may raise interest rates around the weekend to combat surging prices, the state-run China Securities Journal cited analysts as saying. November's consumer price index is due out on Monday.
The dollar fell to as low as ¥82.30 before climbing back to ¥82.63, compared to ¥82.67 in New York on Monday.
The yen's surge was "a little one-sided," commented Japanese Finance Minister Yoshihiko Noda. The dollar sank to a 15-year low of ¥80.21 in early November.
In recent days the yen has risen on renewed fears for the US economy following weak US jobs data and comments from US Federal Reserve chairperson Ben Bernanke that further stimulus measures might be a possibility.
The Japanese unit gained more momentum after the report on Tuesday that the Chinese central bank may raise interest rates around this weekend, causing short-term investors to trim holdings of risk-sensitive currencies, said Hideaki Inoue, senior dealer at Mitsubishi UFJ Trust and Banking.
While the report in the journal may not reflect official views in Beijing, traders noted that China has a history of announcing tightening measures in off-market hours.
The euro was changing hands at $1.3338, up from $1.3304 in New York late on Monday. It stood at ¥109.98 from ¥109.96.
The single currency trimmed earlier losses in the belief that the beleaguered Irish government's €6bn austerity budget will be passed at a parliamentary vote, enabling a huge bailout, dealers said.
Ravaged by the global financial crisis and a deep recession, Ireland won an €85bn rescue deal from the European Union and the International Monetary Fund just over a week ago.
But the euro's gains were limited as many investors remained cautious about the issue, analysts said.
"Investors want to wait to see how the (Irish) vote actually turns out" before making major bets on the euro, Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow, told Dow Jones Newswires.
The dollar was mixed against other Asian currencies.
It rose to $1.3044 Singapore dollars from $1.3032 on Monday and to 1 135.10 South Korean won from 1 132.30.
It slipped to 43.40 Philippine pesos from 43.70, to $30.11 Taiwan dollars from $30.14, to 9.010 Indonesian rupiah from 9 015, and to 29.98 Thai baht from 30.04.
